Parental Responsibility for a Teen's Car Accident

No parent wants to get that phone call -- the one when your teen tells you that she's been in a car accident. While potential injury and medical care should be your first priority, dealing with fault, liability and insurance will soon follow. If your teen was responsible for the accident, as her parent you might bear some of the liability. Learn about your rights in your state of residence and you can work with your insurance company to clean up the mess that follows an accident.

  1. Family Purpose

    • When your teen is in an accident, it's likely that an insurance company will ask whose car she was driving and where she was going. This is to establish something called "family purpose." If your teen was driving because you sent her on an errand or for your convenience, the purpose of the drive could transfer liability to you, explains John Harris, a Georgia-based insurance defense lawyer. This is similar to an employee getting into an accident while under the direction of an employer. In a case like this, the employer is then liable for the action because of the intent of the trip.

    Negligent Entrustment

    • You could also be deemed liable if the insurance company decides that you were negligent in directing your teen. If your teen is an unlicensed driver, for instance, and you gave her permission to drive, you would then be liable for the damage. This also applies if you know that your teen is not a safe driver or you allow your teen to drive while under the influence of alcohol or drugs. You're liable any time you entrust your vehicle to someone who is incompetent behind the steering wheel.

    Parental Assets

    • Insurance companies are likely to press for parental liability for the obvious fact that teens don't have much in the way of assets. Liability limits cap the amount an individual can sue for in damages. If your insurance company pays out an amount to an injured party, that person can still sue you for further damages if warranted. For instance, if you have a liability limit of $50,000, but the damages came to $90,000, you could be responsible for the remaining amount if a judge rules that you are liable. Since your teen doesn't have an extra $40,000, it'll be you who will have to pay the remaining amount.

    State Laws and Insurance

    • State laws for liability can vary so it's important to talk to your insurance company about your options. While you can't transfer all liability to your teen, you can ensure that you have adequate coverage befitting a new and inexperienced driver. You can also make sure that your teen has the proper training and is responsible behind the wheel before you hand over the keys with confidence. Talk to your insurance provider about your concerns so that together you can create a level of coverage that will protect both your teen -- and you.

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